HC Deb 07 March 1972 vol 832 cc1219-21
11. Mr. John Smith

asked the Chancellor of the Exchequer if, in the light of recent events, he will make a statement on the Government's policy towards prices and incomes.

Mr. Barber

Yes Sir, the object of the policy is to decrease the rate of inflation, and that is being achieved.

Mr. Smith

Does the right hon. Gentleman not recognise that whatever it was that passed for a policy for prices and incomes since the date of the election has now collapsed miserably in ruins? Is it not becoming increasingly clear that the Government should have sought the co-operation of trade unions and employers eighteen months ago, instead of belatedly now? Is it not also true that the only lame ducks around these days are the policies which this Government are trying to follow?

Mr. Barber

No, Sir. The facts do not support what the hon. Gentleman has said. If he and the House will consider the index of retail prices, for example, they will see that the actual percentage change over six months earlier has been as follows—April last year, 5.7; May, 5.7; June, 5.6; July, 5.4; August, 5.1; September, 4.7; October, 3.4; November, 3.1; December, 2.9, and January, 2.6. Although you would not notice it, Mr. Speaker, from the reaction of hon. Gentlemen opposite, I am sure that they are just as delighted as the housewife.

Mr. Hordern

Does my right hon. Friend not agree that those figures show that the Government's policy in this respect is working and will continue to work? Does he not further agree that in those circumstances the Government have no intention whatever of introducing any form of statutory prices and incomes policy?

Mr. Barber

The answer to my hon Friend is "Yes", on both points.

Mr. Crawshaw

Is the right hon. Gentleman aware that I am not particularly concerned about the figures that he has quoted? Is not the important thing that, irrespective of the recent award, which was fully justified, all too often in the past the only people who have been getting the increases are those who can exercise the greatest power? Surely, in our economy the weaker unions and other people should be considerd, and not just those who can blackmail the community.

Mr. Barber

I am very pleased to know that we have the support of at least one hon. Member opposite who is considering the plight of the weaker sections of the community.

Mr. Emery

Would my right hon. Friend make it clear to hon. Members opposite that the prices and incomes policy backed by legislative control was a complete failure, which had to be given up by the last Government? Would he urge them to back voluntary policies, which are the only ones that the T.U.C. wishes to see brought about, instead of currently backing every wage claim, which is bound to bring greater inflation?

Mr. Barber

My hon. Friend has a very good point. One point which has emerged clearly from our interchanges on these matters is that the Opposition have abdicated their responsibility. When they were last in office they at least tried to keep down prices and the cost of living. As my hon. Friend has said, they introduced a comprehensive control of wages by statute, which is certainly something which this Government are not prepared to do.

Mr. Taverne

Will the Chancellor not seriously consider that his N-1 formula on which his whole policy is based has been shown to be unworkable because it cannot make any allowance for special cases like that of the miners' settlement?

Mr. Barber

Each case is considered on its merits, but if the hon. and learned Gentleman wants to see a de-escalation of the increase in prices, it is essential that there should be a de-escalation in the level of wage settlements.